Dear sir
my client is pvt ltd, i would like to know that if paid up capital of the co. is Rs. 11 Lacs and share premiume is Rs 8 Crores, then CARO is applicable to my client.
Please ans immediatly.
thanking you.
yours friend.
bharat
13 Replies
(Guest)
A Private Limited Company with a paid up capital and reserves not more than Rs. 50 lacs are not required to compliance with CARO.
But, Conditions regarding Private Limited Company are cumulative, namely, there are types of limitations on each compliance (namely, reserves you quoted are beyond limit) regarding CARO requirements.
I personally don't think it should fall for applicablity of CARO. Still, do consult other advises :-)
$h@$\/\/@t
(job)
(53 Points)
Replied 20 March 2010
yes definately caro will applicable
clarification, with reference to applicability of CARO 2004 for Private Limited companies, conditions for non-applicability:
1. paid up capital and reserves not more than Rs.50 Lacs and
2. which doesn’t have loan outstanding exceeding Rs.25 from any bank or Fin instn and
3. doesn’t have turnover of turnover of Rs.5 crores
at any point of time during the financial year,
bharat_ca2008
(Propietor)
(49 Points)
Replied 20 March 2010
but sir Rs. 8 crores is share premium on share issued by co., othe conditon of CARO is not apply but i confused in paid up capital and reserve, whethe share primium is considered under reserve for CARO?
Please ans.
sai
(student)
(48 Points)
Replied 20 March 2010
| Originally posted by : bharat_ca2008 | ||
 |
but sir Rs. 8 crores is share premium on share issued by co., othe conditon of CARO is not apply but i confused in paid up capital and reserve, whethe share primium is considered under reserve for CARO? Please ans. |
 |
For determining applicability of CARO (the order) to a pvt ltd company, both revenue as well as capital reserves are to be considered while computing the limit of rupees fifty lakhs prescribed for paid-up capital and reserves.
Revaluation reserve,if any, should also be taken into consideration while determining the figure of reserves for the limited purpose of determining the applicability of the Order.Credit balance of Profit and Loss Account is to be considered as a part of reserve while debit balance, if any, is to be reduced.However, Miscellaneous expenditure to the extent not written off should not be deducted from the figure of reserves for the purpose of computing the above limit.
(Source: Study Material of Advanced Auditing).
bharat_ca2008
(Propietor)
(49 Points)
Replied 20 March 2010
| Originally posted by : Uday Kiran | ||
|
|
Bharat, i think it is clear to you. |
|
Thanking you.
(Guest)
Sir.
Applicablity of CARO is primary when the Private Limited company crosses the limitation put forward.
Secondly, it is not easy to say with the entries you gave to us. The compliance is preceded by a complete check-list.
As such, Is this Capital and Share premium standing after undergoing all necessary audit requirements inclusive of adjustments and specific comments?
Thirdly, there is a major clause as per latest amendment prescribed by CARO regarding inclusion of reserves and their audit procedure after considering all necessary adjustments.
Lastly, the best source for determining the client's Pvt. Ltd Co. applicablity for CARO is by taking due guidance by CARO 2004 latest amendments.
Max Payne
(employed)
(2574 Points)
Replied 20 March 2010
Hi Uday has given the correct answer...
CARO is required if any one of the conditions is fulfilled...
There is no requirement of cumulatively fufilling all the conditions...
Pls tell me what are the latest amendment prescribed by CARO regarding inclusion of reserves and their audit procedure... i am not aware.....
praveen
(Chartered Accountant)
(6971 Points)
Replied 20 March 2010
Max Payne
(employed)
(2574 Points)
Replied 20 March 2010
Praveen is there a typo on the link?
It says that CARO is applicable only to 4 types of companies....
Mohd Javed Khan
(CA FINAL)
(622 Points)
Replied 21 March 2010
| Originally posted by : Uday Kiran | ||
|
|
For the purpose of applicability of CARO to a Pvt Company, paid up share capital + reserves should exceed Rs 50 lakhs. Here reserves include both revenue as well as capital reserves. Share premium is also considered for the above purpose. Iin your case both Share Capital & Share Premium exceed Rs 50 Lakhs. Hence, CARO is applicable. |
|
bro sahi kah raha hai i agree with him .....................
Sharad Suman Das
(art)
(141 Points)
Replied 21 March 2010
Dear Friend,
Inyour case Caro Will be applicable as as the applicability does not depends on "Capital or Revenue " nature of reseve. CARO wiil will be applicable from the date the "Aggregate of paid up capital and reserve Exeeds Rs. 50 Lacs.
If any one has recent ammend emnts please share
Rgds
Sharad
Payal Gupta
(article assistant)
(176 Points)
Replied 30 March 2010
| Originally posted by : Uday Kiran | ||
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this is the right answer
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